Sometimes, it’s helpful to think of money as a cognitive being with a mind of its own. If you neglect it and treat it poorly, it will leave you. Sadly, most people are at a loss, when it comes to how they should manage their own money. Sure, they all know that they should be trying to save money, bit by bit, but yet so many people continue to make financial steps that are at odds with their own benefit. Here are some of the many stupid money mistakes that we all continue to make, even though we know they are bogging us down…
Going overboard on a credit card
When somebody finds themselves buried in a pile of debt of their own creation, you can rest assured that it either has to do with trying to get themselves an education or a credit card. While there are ways that a credit card can be used to your benefit, it’s important to think about whether you can really take the temptation that a credit card presents, right now. Sure, there’s no interest if you pay everything off in a month, but it can be really easy to let it slip by.
Avoid getting a credit card if you don’t already have an ample amount of savings built up, so that you can build some credit and get points back, but be sure to set up a system that limits how much you allow yourself to use it.
Carelessly spending on technology
Today, most people carry around a costly little supercomputer in their pockets that allows them to surf the web and be connected with pretty much anyone and anything on the globe. This is an incredible opportunity that we are afforded because of the time that we were born in. However, technology can also easily unnecessarily eat into your wallet, if you let it. For example, a shocking amount of people with smartphones will break them within a year, which requires them to be replaced or repaired.
The truth is, now that technology is so widespread, we are all a little careless with these expensive appendages. Be sure to take care of your smartphone. Replacing and repairing those buggers can take hundreds of dollars out of your income, every year.
Spending on home improvements that don’t matter
If you’re a homeowner, then you’ve obviously made some smart financial moves, since you probably have a relatively decent credit score and were able to make at least somewhat of a down payment (hopefully 20%!). However, you can still make stupid money mistakes, as a homeowner. Now that you own a home, every dollar that you spend on that home is an investment.
However, some of those investments are a little more valuable than others. Needlessly spending on home improvements with no ROI means that the home you bought is costing you more money than it needs to. Here are some home improvements that are going to give you some more bang for your buck.
The little things, every day
Truth be told, there are dozens of stupid little things that we spend money on, every single day. For example, purchasing that $4 latte at a coffee shop instead of brewing a pot of coffee is going to set you back hundreds of dollars, every year. While these small expenses may seem like no big deal at the time, they can add up to major expenses, over time.
This isn’t to say that you can’t buy the things that make you happy. Maybe that latte is the best part of your day, and is the thing that gets you through the morning. If that’s the case, then it sounds like money well spent! However, we could all do well by being a little more conscious of the little things that we spend money on, every day, and considering if these things are really worth the money that they drain over time.
Neglecting to Save
Speaking of those little things that add up, that money is usually much better allocated when you put it into savings. Big costs that completely throw off your finances crop up all the time. It might be a health problem or accident. It could be a major repair for your car that’s not covered by insurance. In any case, these derailments can be avoided with a little bit of a safety cushion, provided by a solid rainy-day fund. Most professionals recommend that you have a savings account the matches three months of salary, just in case. Read here for more information about why and how to save up money.